This (behind a paywall), the latest interview with Sampo Päällysaho published in Talouselämä magazine, may contain some answers to questions troubling investors: Sampo Päällysaho joutui kovaan paikkaan: Nyt hän kertoo, miten Tokmanni pelastetaan | Talouselämä
I am paraphrasing loosely, as I read the magazine at the library; Päällysaho’s statements are sometimes very verbatim, but I have not added quotation marks.
Currently, the board is indeed working on a strategy, considering, among other things, the number of stores in Sweden and Denmark, accessibility, investments, and overall profitability, and the stores already opened provide a good indication for these considerations. Rautiainen previously spoke about the Capital Markets Day being scheduled for around the turn of the year; in any case, there is no date in Päällysaho’s calendar yet.
For some reason, Päällysaho highlights his Swedish language skills; the lack of this skill among Tokmanni’s management has also been criticized on the forum. He started his career at 16 at the Espoo cooperative Varuboden and was the only Finnish speaker among the staff there, so learning Swedish went quickly and has helped in his career in a Nordic work environment where “Scandinavian” is spoken.
The idea behind Tokmanni expanding its grocery business through its Spar agreement is simply to improve the customer experience; it has already brought stronger customer traffic and a larger shopping basket to the renovated stores. The fact is that a customer might visit a regular Tokmanni once a month, but a grocery store 2–4 times a week. Thus, Tokmanni is targeting these customers and trying to get them to visit the stores more often. Spar, on the other hand, has expertise in different concepts and sub-concepts, meaning not all expertise needs to be centralized at Tokmanni, as support for store openings is obtained from them. The board will also take a stand on Eurospar investments in its strategy work.
Then, Päällysaho’s own opinion on what is fundamentally the problem with Dollarstore: at the time of the acquisition, Tokmanni was already very systematic, with its own product sourcing channels in Asia and Europe. Dollarstore, on the other hand, was the creation of a single entrepreneurial family that used many middlemen in its procurement. Its assortment lacked product categories such as clothing, tools, and groceries. After the acquisition, Dollarstore operated as a fairly independent unit; this phase was likely observed for too long. However, it was known early on that synergy would only be created through close cooperation. So now, the ranks have been tightened and decision-making has been centralized in Finland. The decisions regarding assortment, procurement, and pricing are made here. Local purchases are only supplementary.
Product categories familiar from Finland have been taken to pilot stores in Sweden, and their sales have exceeded expectations. The problems have therefore been identified and now they must be pushed through firmly. They increase the sales and profitability per square meter of every store. Since there are 142 stores in Sweden and product procurement cycles are long, it will take at least a year before this starts to be visible everywhere.
To the question of how discount retail will fare when the economy turns and consumers no longer need to pinch pennies, Päällysaho answers: It is always thought that in a downturn, discount retail does well. However, it is already quite a trend that people want to buy more cheaply. So, the “thrifty gear” would remain on for consumers.
In a high-growth economy, Tokmanni gets to benefit when deferred purchases and investment decisions are realized. It must be ensured that by then, assortments have been replenished and the right products can be found on the shelves.
The importance of seasons is also emphasized; one must succeed in them because the margin on general merchandise is so much better than on groceries. The Swedish crayfish parties are mentioned.